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John Cochrane Misunderestimates the Fed
In my previous post, I criticized Ben Bernanke’s speech last week at the annual symposium on monetary policy at Jackson Hole, Wyoming. It turns out that the big event at the symposium was not...
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More on Currency Manipulation
My previous post on currency manipulation elicited some excellent comments and responses, helping me, I hope, to gain a better understanding of the subject than I started with. What seemed to me the...
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Currency Manipulation: Is It Just About Saving?
After my first discussion of currency manipulation, Scott Sumner responded with some very insightful comments of his own in which he pointed out that the current account surplus (an inflow of cash)...
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It’s the Endogeneity, [Redacted]
A few weeks ago, just when I was trying to sort out my ideas on whether, and, if so, how, the Chinese engage in currency manipulation (here, here, and here), Scott Sumner started another one of his...
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Those Dreaded Cantillon Effects
Once again, I find myself slightly behind the curve, with Scott Sumner (and again, and again, and again, and again), Nick Rowe and Bill Woolsey out there trying to face down an onslaught of Austrians...
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The State We’re In
Last week, Paul Krugman, set off by this blog post, complained about the current state macroeconomics. Apparently, Krugman feels that if saltwater economists like himself were willing to accommodate...
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Why Are Real Interest Rates So Low, and Will They Ever Bounce Back?
In his recent post commenting on the op-ed piece in the Wall Street Journal by Michael Woodford and Frederic Mishkin on nominal GDP level targeting (hereinafter NGDPLT), Scott Sumner made the following...
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Scott Sumner, Meet Robert Lucas
I just saw Scott Sumner’s latest post. It’s about the zero fiscal multiplier. Scott makes a good and important point, which is that, under almost any conditions, fiscal policy cannot be effective if...
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Japan Still Has Me Worried
Last Thursday night, I dashed off a post in response to accusations being made by Chinese and South Korean critics of Abenomics that Japan is now engaging in currency manipulation. When I started...
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Watch out for that Fed Reaction Function
Scott Sumner had a terrific post today. The title said it all, but the rest of it wasn’t bad either. The stock market wants fast economic growth, and they want the Fed to think economic growth is slow...
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My Milton Friedman Problem
In my previous post , I discussed Keynes’s perplexing and problematic criticism of the Fisher equation in chapter 11 of the General Theory, perplexing because it is difficult to understand what Keynes...
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Sumner Sticks with Friedman
Scott Sumner won’t let go. Scott had another post today trying to show that the Cambridge Theory of the demand for money was already in place before Keynes arrived on the scene. He quotes from Hicks’s...
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Friedman’s Dictum
In his gallant, but in my opinion futile, attempts to defend Milton Friedman against the scandalous charge that Friedman was, gasp, a Keynesian, if not in his policy prescriptions, at least in his...
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The Internal Contradiction of Quantitative Easing
Last week I was struggling to cut and paste my 11-part series on Hawtrey’s Good and Bad Trade into the paper on that topic that I am scheduled to present next week at the Southern Economic Association...
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Does Macroeconomics Need Financial Foundations?
One of the little instances of collateral damage occasioned by the hue and cry following upon Stephen Williamson’s post arguing that quantitative easing has been deflationary was the dustup between...
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Never Mistake a Change in Quantity Demanded for a Change in Demand
We are all in Scott Sumner’s debt for teaching (or reminding) us never, ever to reason from a price change. The reason is simple. You can’t just posit a price change and then start making inferences...
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Did Raising Interest Rates under the Gold Standard Really Increase Aggregate...
I hope that I can write this quickly just so people won’t think that I’ve disappeared. I’ve been a bit under the weather this week, and the post that I’ve been working on needs more attention and it’s...
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Never Reason from a Disequilibrium
One of Scott Sumner’s many contributions as a blogger has been to show over and over and over again how easy it is to lapse into fallacious economic reasoning by positing a price change and then trying...
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The Backing Theory of Money v. the Quantity Theory of Money
Mike Sproul and Scott Sumner were arguing last week about how to account for the value of fiat money and the rate of inflation. As I observed in a recent post, I am doubtful that monetary theory, in...
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Monetarism and the Great Depression
Last Friday, Scott Sumner posted a diatribe against the IS-LM triggered by a set of slides by Chris Foote of Harvard and the Boston Fed explaining how the effects of monetary policy can be analyzed...
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